Rick BissonFor many buyers, the first step in beginning the home-buying process is to identify one or more properties of interest. Having picked out a few potential properties, buyers may be inclined to contact the listing agent directly. While this is a logical train of thought, before doing this it’s important to understand agent representation and who represents whose best interest in a real estate transaction.

In Maine, agents are required to provide buyers and sellers with the Real Estate Brokerage Relationship Form when a substantive real estate conversation occurs. A Real Estate Brokerage Relationship Form outlines the various agency relationships. However, most importantly, the form explains the difference between client and customer representation.

As a customer, Maine law requires that all real estate brokerage companies, their affiliated agents and brokers perform certain basic duties when dealing with an unrepresented buyer or seller. Their requirements include:

1. To disclose all material defects pertaining to the physical condition of the property;

2. To treat both the buyer and seller honestly;

3. To account for all money and property received from or on behalf of the buyer or seller;

4. To comply with all state and federal laws pertaining to real estate brokerage activity.

For a licensee to represent an individual as a client, a written brokerage agreement must be entered into. Without a written agreement, the licensee is not legally obligated to promote the buyer’s best interest or to keep any information confidential, including an individual’s bargaining position.

The written agreement creates a client-agent relationship between the individual and the licensee. As a client, an individual can expect the following services, in addition to the basic services provided to a customer:

1. To perform the terms of the written agreement with skill and care;

2. To promote the clients best interests;

3. To maintain the confidentiality of specific client information (including bargaining information).

As a client, several agent relationships are available: Seller-client, buyer-client, dual-disclosed, and transactional.

Seller-client (listing agent or seller’s agent): When a listing agreement is signed, the listing agent puts the seller’s needs first and negotiates the best price and best terms for the seller.

Buyer-client (buyer’s agent): When a buyer’s brokerage agreement is signed, the buyer’s agent puts the buyer’s needs first and negotiates the best price and best terms for the buyer. In most cases, the cost for a buyer’s agent is paid by the seller at closing at no cost to the buyer.

Disclosed dual agent: In certain situations a licensee may act as an agent for and represent both the buyer and the seller in the same transaction. This is called disclosed dual agency. Both the buyer and the seller must consent to this type of representation in writing.

This form of representation can sometimes be tricky for the agent. Disclosed dual representation may require the agent to disclose some information but not all information. In this type of agency relationship, neither party can expect the agent to put one party’s interests ahead of the other’s, or to advise either party on how to gain an advantage over the other.

Transaction broker: Some agents and buyers prefer to work with a transaction broker. Transaction brokers do not represent either party. They simply facilitate the transaction. A transaction agent helps to fulfill the obligations of the purchase contract and provides the necessary paperwork for each side. A transaction broker cannot advise a customer.

For many people, buying or selling real estate is the biggest financial decision they’ll make in their lifetime. Therefore, it is important that you understand the various types of broker relationships and you are comfortable with the choice you make.

The next time you are shopping for homes, think twice before calling the listing agent as they represent the seller. Be sure to contact a trusted, expert Realtor.

This column is produced by Rick Bisson and his family, who own Bisson Real Estate with Keller Williams Realty of Midcoast and Sugarloaf.